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Saturday, August 12, 2017

Singapore Executives Sentenced for Fraud in International Navy Corruption Scandal

Two former executives of foreign defense contractor Glenn
Defense Marine Asia (GDMA) were sentenced today for conspiring to submit bogus
claims and invoices to the U.S. Navy in an effort to win contracts and
overcharge the U.S. Navy by tens of millions of dollars as part of a years-long
corruption and fraud scheme.

Acting Assistant Attorney General Kenneth A. Blanco of the
Justice Department’s Criminal Division, Acting U.S. Attorney Alana W. Robinson
of the Southern District of California, Director Andrew L. Traver of the Naval
Criminal Investigative Service (NCIS) and Director Dermot F. O’Reilly of the
Defense Criminal Investigative Service (DCIS) made the announcement.

Neil Peterson, 39, and Linda Raja, 44, both of Singapore,
were sentenced to 70 and 46 months, respectively, by U.S. District Judge Janis
L. Sammartinoof the Southern District
of California.Both worked as chief
deputies for GDMA, which was owned by Leonard Glenn Francis.Peterson served as the vice president for
global operations for GDMA and Raja served as GDMA’s general manager for
Singapore, Australia and the Pacific Isles.

Both defendants were arrested by authorities in Singapore at
the request of the U.S. government and were extradited on Oct. 28, 2016.They each pleaded guilty in May 2017 to one
count of conspiracy to defraud the United States with respect to claims.

According to admissions made as part of Peterson’s and
Raja’s plea agreements, they and other members of GDMA’s management team
created and submitted fraudulent bids that were either entirely fictitious,
contained falsified prices supposedly from actual businesses, or fraudulently
stated that the business shown on the letterhead could not provide the items or
services requested.In this manner,
Peterson, Raja and other members of GDMA’s core management team could ensure
that GDMA’s quote would be selected by the U.S. Navy as the supposed low
bidder.GDMA could thus control and
inflate the prices charged to the U.S. Navy without any true, competitive
bidding, as required, they admitted.

Peterson and Raja admitted that they and other members of
the GDMA management team knowingly created and approved fictitious port
authorities with fraudulently inflated port tariff rates, and approved the
presentation of such fraudulent documents to the U.S. Navy. GDMA thus charged
inflated prices to the U.S. Navy, rather than what GDMA actually paid to the
bona fide port authorities.

For example, Peterson and Raja admitted that for the visit
of the U.S.S. Bonhomme Richard to Kota Kinabalu, Malaysia, in or about October
2012, under the direction of Peterson and other members of GDMA's core
management team, false documents and inflated invoices were presented to the
U.S. Navy.The full amount billed to the
U.S. Navy for this visit was $1,232,858, of which approximately $877,413 was
fraudulently inflated, Peterson and Raja admitted.

Peterson and Raja admitted that losses to the U.S. Navy
exceeded $34,800,000 as a result of this scheme.

So far, 17 of 27 defendants charged in the U.S. Navy bribery
and fraud scandal have pleaded guilty.All defendants are presumed innocent unless and until convicted beyond a
reasonable doubt in a court of law.

The DCIS, NCIS and the Defense Contract Audit Agency are
investigating.Assistant Chief Brian R.
Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys
Mark W. Pletcher and Patrick Hovakimian of the Southern District of California
and are prosecuting the case.The
Criminal Division’s Office of International Affairs provided substantial
assistance in this matter.